1. PRODUCT DEVELOPMENT
CHAPTER FOURTEEN

2. Warm Up
You have a great idea for a new brand of sneakers. What are the steps that you need to take to create and launch your new sneaker line?

3. Your Sneaker Line…
Topics of interest: Finding a manufacturer, prototypes, design, color, material, pricing, box, packaging, where to sell, marketing options, market research, test market, models, cost to manufacture, sales projections, sale price, getting distribution…. A lot goes into creating a sneaker line!

4. Product Development
The process of modifying a current product or creating a new product. There are 7 steps in the new product development process.

5. 7 Steps of Product Development
New Product Development Strategy
Idea Generation
Screening and Evaluation
Business Analysis
Development
Test Marketing
Commercialization

6. Step 1: New Product Development Strategy
Create a strategic objective for the company. How will you differ in the market? What is your strategy?

7. Step 2: Idea Generation
Focus on brainstorming sessions to come up with new innovative ideas. Many entrepreneurs spend countless hours brainstorming innovative ideas.

8. Step 3: Screening and Evaluation
Compile the brainstorming list into smaller units to narrow ideas. This step is all about evaluating ideas and trying to pick one idea that offers the greatest opportunity for success.

9. Step 4: Business Analysis
Create financial expense and sales projections for the new product in the future. Very important step to see if the idea is financial feasible (do you have enough money?) and if it can be profitable.

10. Step 5: Development
The new product idea has turned into a prototype and will undergo tests. Prototypes are very important to assess and make changes as needed.

11. Prototype
A preliminary model of something.

12. Prototype
What are some examples of prototypes you have seen before?

13. Step 6: Test Marketing
Offer the product for sale in a small geographic area to test its success. This step is crucial to analyze the feedback from the test market and make changes if necessary.

14. Step 7: Commercialization
The new product is brought to market with full scale production, sales and marketing support. At this point the product is profitable, people want it and you have decided to take it to the mass market!

15. Outsourcing
Contracting a party outside the company to perform services and create goods what were traditionally performed in house by the company’s own employees and staff.

16. Benefits of Outsourcing
Control costs
Increase efficiency
Reduce labor costs
Reduce risks
Start new projects quickly

17. Development Team
A team working collectively for developing or creating new products.

18. Innovation
A new idea, device, method or way of doing something that enhances the lives of users.

19. Think about it…… How does UBER benefit the lives of both users and drivers?

20. Production Costs
The costs incurred by a business when manufacturing a good or providing a service.

21. Concept Testing
The process of performing tests and surveys to evaluate a new product idea prior to the introduction to the market.

22. Automation
The process of using automatic equipment or technologies instead of human labor to perform business processes.

23. Automation at work in a Tesla Factory
How the Model S is made

24. Quality Control
A system put in place to maintain certain standards of output.

25. Productivity
An economic measure of output to measure the efficiency or units of output.

26. Logistics
A detailed organization of complex operations involving many people, destinations and supplies.

27. Growth Plan
The practice of setting goals and creating strategies and tactics to accomplish them.